financial plan

5 Tips for Restarting Your Finances and Building Future Financial Success

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Do you feel like you’re spinning your wheels when it comes to money? With the rising cost of living, many people feel like it’s impossible to get ahead. As grocery bills balloon and the cost of everything seems to be on the rise, dealing with debt can feel like an insurmountable challenge.

While inflation may be out of your control, there are steps that you can take to get your fresh financial start going today.

1. Create a Financial Identity

Improving your finances is a tough goal to pursue, but part of the issue may be that it’s too vague. It’s hard to save when you don’t know what you’re saving for.

Part of the solution could be creating a personal financial identity. This involves outlining clear financial goals for yourself, such as:

  • Getting out of debt.
  • Buying a home.
  • Going on a dream vacation.
  • Building a retirement fund.

Your financial plan should align with your personal goals in life. It can change your whole outlook on money.

2. Budget More Money to Pay Back Debt

Once you know why you’re cutting back on your spending, you should have more motivation to make real changes.

Budgeting is a simple thing to say you’re going to do, but it’s much tougher to follow through. Still, just knowing how much you’re really spending and comparing that to how much you should be spending can motivate you to develop new habits.

Making a budget can also give you the push to trim those expenses that are easy to cut, like underused subscriptions. This can also be an opportunity to rethink bigger financial commitments, like paying for insurance on a second car.

3. Reset Your Finances with a Consumer Proposal

When budgeting isn’t enough to set your finances straight, you may need to turn to debt relief to reset your finances. One of the options available to you is a consumer proposal, a legal procedure that can reduce the amount of debt that you owe, stop collection efforts from creditors, and put an end to the interest charges that continue to cost you more than you borrowed in the first place.

If you want to file a consumer proposal, the first step is to get in touch with a Licensed Insolvency Trustee. They can help you understand if you qualify for a consumer proposal and how it can help you get out of debt.

A consumer proposal can reduce unsecured debts like credit cards, payday loans, tax debt, and personal lines of credit, but not secured debts like car payments or your mortgage.

4. Check Your Credit Report

Your credit report is a history of your relationship with credit. It tells potential creditors, landlords, and even employers if you’ve missed debt payments, paid late, or applied for credit recently. Your credit score is a numerical value that gives creditors an at-a-glance assessment of your credit risk, taking into account factors such as:

  • Credit history
  • Credit utilization rate (used credit vs. available credit)
  • The length of your credit history
  • Recent inquiries into your credit history

You can get a free credit report from credit bureaus, although you may need to pay to get your credit score as well.

5. Automate Your Savings

Automating your savings is one of the best ways to develop a new financial habit. It’s a powerful way to make sure part of your paycheque goes toward your financial future. It all becomes possible once you’ve paid off your debts and you can start focusing on the future.